Democratick Editorials: Essays in Jacksonian Political Economy

By William Leggett

Ten years after Thomas Jefferson’s death in 1826, an outspoken young editor in New York City was reformulating and extending the Jeffersonian philosophy of equal rights. William Leggett, articulating his views in the columns of the New York
Evening Post,Examiner, and
Plaindealer, gained widespread recognition as the intellectual leader of the
laissez-faire wing of Jacksonian democracy…. [From the Foreword by Lawrence H. White.]

Book Cover

Translator/Editor

Lawrence H. White, ed.

First Pub. Date

1834

Publisher

Indianapolis: Liberty Fund, Inc. Liberty Press

Pub. Date

1984

Comments

Essays first published 1834-1837.

Copyright

Portions of this edited edition are under copyright. Picture of William Leggett courtesy of United States Library of Congress. Original contains the inscription: "Engraved by Sealey, from a Painting by T. S. Cummings, N A." and includes Leggett's signature below.

THE CORPORATION QUESTION

Plaindealer, December 24, 1836.

One of the newspapers which has done us the honour to notice this journal, animadverts, with considerable asperity, upon our declaration of interminable hostility to the principle of special incorporation, and points our attention to certain incorporated institutions, which, according to the universal sense of mankind, are established with the purest motives, and effect the most excellent objects. The ready and obvious answer to the strictures we have provoked is, that it is the means, not the end, which furnishes the subject of our condemnation. An act of special incorporation may frequently afford the persons associated under it facilities of accomplishing much public good; but if those facilities can only be given at the expense of rights of paramount importance, they ought to be denied by all whose political morality rejects the odious maxim that the end justifies the means. It would be a very strained and unwarrantable inference from any remarks we have made, to say that we are an enemy to churches, public libraries, or charitable associations, because we express hostility to special legislation. It would be an unwarranted inference to say that we are even opposed to the principle of incorporation; since it is only to the principle of
special incorporation that we have expressed hostility. We are opposed, not to the object, but to the mode by which the object is effected. We are opposed, not to corporation partnerships, but to the right of forming such partnerships being specially granted to the few, and wholly denied to the many. We are opposed, in short, to unequal legislation, whatever form it may assume, or whatever object it may ostensibly seek to accomplish.

It has been beautifully and truly said, by the illustrious man who presides over the affairs of our Confederacy, that “there are no necessary evils in government. Its evils exist only in its abuses. If it would confine itself to
equal protection, and, as heaven does its rains, shower its favours alike on the high and the low, the rich and the poor, it would be an unqualified blessing.” But it departs from its legitimate office, it widely departs from the cardinal principle of government in this country, the equal political rights of all, when it confers privileges on one set of men, no matter for what purpose, which are withheld from the rest. It is in this light we look upon all special acts of incorporation. They convey privileges not previously enjoyed, and limit the use of them to those on whom they are bestowed. That special charters are, in many instances, given for objects of intrinsic excellence and importance, is freely admitted; nor do we desire to withhold our unqualified acknowledgment that they have been the means of effecting many improvements of great value to the community at large. Let it be clearly understood, then, that we do not war against the good achieved; but seek only to illustrate the inherent evil of the means. A special charter is a powerful weapon; but it is one which should have no place in the armory of the democracy. It is an instrument which may hew down forests, and open fountains of wealth in barren places; but these advantages are purchased at too dear a rate, if we give for them one jot or tittle of our equal freedom. As a general rule, too, corporations act for themselves, not for the community. If they cultivate the wilderness, it is to monopolize its fruits. If they delve the mine, it is to enrich themselves with its treasures. If they dig new channels for the streams of industry, it is that they may gather the golden sands for themselves, as those of Pactolus were gathered to swell the hoards of Croesus.

Even if the benefits, which we are willing to admit have been effected by companies acting under special corporate privileges and immunities, could not have been achieved without the assistance of such powers, better would it have been, in our opinion, far better, that the community should have foregone the good, than purchase it by the surrender, in any instance or particular, of a principle which lies at the foundation of human liberty. No one can foretell the evil consequences which may flow from one such error of legislation. “Next day the fatal precedent will plead.” The way once open, ambition, selfishness, cupidity, rush in, each widening the breach, and rendering access easier to its successor. The monuments of enterprise erected through the aid of special privileges and immunities are numerous and stupendous; but we may yet be sadly admonished

—”how wide the limits stand,

Between a splendid and a happy land.”

But, fortunately, we are not driven to the alternative of either foregoing for the future such magnificent projects as have heretofore been effected by special legislation, or for the sake of accomplishing them, continuing to grant unequal privileges. It is a propitious omen of success in the great struggle in which the real democracy of this country are engaged, that monopolies, (and we include in the term all special corporate rights) are as hostile to the principles of sound economy, as they are to the fundamental maxims of our political creed. The good which they effect might more simply and more certainly be achieved without their aid. They are fetters which restrain the action of the body politic, not motories which increase its speed. They are jesses which hold it to earth, not wings that help it to soar. Our country has prospered, not because of them, but in spite of them. This young and vigorous republic has bounded rapidly forward, in despite of the burdens which partial legislation hangs upon its neck, and the clogs it fastens to its heel. But swifter would have been its progress, sounder its health, more prosperous its general condition, had our law-makers kept constantly in view that their imperative duty requires them to exercise their functions for the good of the whole community, not for a handful of obtrusive and grasping individuals, who, under the pretext of promoting the public welfare, are only eager to advance their private interests, at the expense of the equal rights of their fellow-men.

Every special act of incorporation is, in a certain sense, a grant of a monopoly. Every special act of incorporation is a charter of privileges to a few, not enjoyed by the community at large. There is no single object can be named, for which, consistently with a sincere respect for the equal rights of men, a special charter of incorporation can be bestowed. It should not be given to establish a bank, nor to erect a manufactory; to open a road, nor to build a bridge. Neither trust companies nor insurance companies should be invested with exclusive rights. Nay, acting in strict accordance with the true principles both of democracy and political economy, no legislature would, by special act, incorporate even a college or a church. Let it not be supposed, however, that we would withhold from such institutions the intrinsic advantages of a charter. We would only substitute general, for partial legislation, and extend to all, the privileges proper to be bestowed upon any. The spirit of true wisdom, in human affairs, as in divine,

“Acts not by partial, but by general laws.”

Nothing can be more utterly absurd than to suppose that the advocacy of these sentiments implies opposition to any of the great undertakings for which special legislative authority and immunities are usually sought. We are opposed only to a violation of the great democratic principle of our government; that principle which stands at the head of the Declaration of Independence; and that which most of the states have repeated, with equal explicitness, in their separate constitutions. A general partnership law, making the peculiar advantages of a corporation available to any set of men who might choose to associate, for any lawful purpose whatever, would wholly obviate the objections which we urge. Such a law would confer no exclusive or special privileges; such a law would be in strict accordance with the great maxim of man’s political equality; such a law would embrace the whole community in its bound, leaving capital to flow in its natural channels, and enterprise to regulate its own pursuits. Stock bubbles, as fragile as the unsubstantial globules which children amuse themselves with blowing, might not float so numerous in the air; but all schemes of real utility, which presented a reasonable prospect of profit, would be as readily undertaken as now. That active spirit of enterprise, which, in a few months, has erected a new city on the field lately desolated by the direst conflagration our history records; that spirit of enterprise, which every year adds whole squadrons to the innumerous fleet of stately vessels that transport our commerce to the remotest harbours of the world; that spirit of enterprise which seeks its object alike through the freezing atmosphere of the polar regions, and beneath the fervour of the torrid zone, displaying the stars and stripes of our country to every nation of the earth; that active spirit would not flinch from undertaking whatever works of internal improvement might be needed by the community, without the aid of exclusive rights and privileges.

The merchant, who equips his noble vessel, freights her with the richest products of nature and art, and sends her on her distant voyage across the tempestuous sea, asks no act of incorporation. The trader, who adventures his whole resources in the commodities of his traffic, solicits no exclusive privilege. The humble mechanic, who exhausts the fruit of many a day and night of toil in supplying his workshop with the implements of his craft, desires no charter. These are all willing to encounter unlimited competition. They are content to stand on the broad basis of equal rights. They trust with honourable confidence, to their own talents, exercised with industry, not to special immunities, for success. Why should the speculators, who throng the lobbies of our legislature, be more favoured than they? Why should the banker, the insurer, the bridge builder, the canal digger, be distinguished by peculiar privileges? Why should they be made a chartered order, and raised above the general level of their fellow-men?

It is curious to trace the history of corporations, and observe how, in the lapse of time, they have come to be instruments that threaten the overthrow of that liberty, which they were, at first, effectual aids in establishing. When the feudal system prevailed over Europe, and the great mass of the people were held in vilest and most abject bondage by the lords, to whom they owed strict obedience, knowing no law but their commands, the power of the nobles, by reason of the number of their retainers and the extent of their possessions, was greater than that of the monarch, who frequently was a mere puppet in their hands. The barons, nominally vassals of the crown, holding their fief on condition of faithful service, were, in reality, and at all times, on any question which combined a few of the more powerful, absolute masters. They made kings and deposed them at pleasure. The history of all the states of Europe is full of their exploits in this way; but the narrative of the red and white rose of England, of the contending houses of York and Lancaster, is all that need be referred to for our present purpose. Corporations were the means at last happily hit upon of establishing a power to counterbalance that so tyrannously and rapaciously exercised by the barons. For certain services rendered, or a certain price paid, men were released from the conditions which bound them to their feudal lords, and all so enfranchised were combined in a corporate body, under a royal charter of privileges and immunities, and were termed “freemen of the corporation.” In process of time, these bodies, by gradual and almost imperceptible additions, grew to sufficient size to afford a countercheck to the power of the nobles, and were at last the instruments, not in England only, but throughout Europe, of overthrowing the feudal system, emancipating their fellow-men from degrading bondage, and establishing a government somewhat more in accordance with the rights of humanity.

But in this country, founded, in theory and practice, on an acknowledgment, in the broadest sense, of the universal right of equal freedom, the grant of special corporate privileges is an act against liberty, not in favour of it. It is not enfranchising the few, but enslaving the many. The same process which, when the people were debased, elevated them to their proper level, now, when the people are elevated, and occupy the lofty place of equal political rights, debases them to comparative servitude. The condition of things in free America is widely different from that which existed in Europe during the feudal ages. How absurd then, to continue a system of grants, for which all actual occasion long since ceased, and which are now at utter and palpable variance with the great political maxim that all alike profess! It is our desire, however, in treating this subject, to use no language which may embitter the feelings of those who entertain contrary views. We wish to win our way by the gentle process of reason; not by the boisterous means which angry disputants adopt. It has, in all times, been one of the characteristic errors of political reformers, and we might say, indeed, of religious reformers, too, that they have threatened, rather than persuaded; that they have sought to drive men, rather than allure. Happy is he “whose blood and judgment is so well commingled,” that he can blend determined hostility to public errors and abuses, with sufficient tolerance of the differences of private opinion and prejudice, never to relinquish courtesy, that sweetener of social life and efficient friend of truth. In a small way, we seek to be a reformer of certain false principles which have crept into our legislation; but as we can lay no claim to the transcendent powers of the Miltons, Harringtons and Fletchers of political history, so we have no excuse for indulging in their fierceness of invective, or bitterness of reproach.

Categories: William Leggett